GovernmentType: Republic, parliamentary democracy.Independence: September 30, 1966.Constitution: March 1965.Branches: Executive--president (chief of state and head of government), cabinet. Legislative--popularly elected National Assembly; advisory House of Chiefs. Judicial--High Court, Court of Appeal, local and customary courts, industrial labor court.Administrative subdivisions: Five town councils and nine district councils.Major political parties: Botswana Democratic Party (BDP)--48 seats, Botswana National Front (BNF)--12 seats, Botswana Congress Party (BCP)--1 seat, Botswana Alliance Movement (BAM), Botswana Peoples Party (BPP)--0 seats.Suffrage: Universal at 18.

PEOPLE AND HISTORYThe Batswana, a term also used to denote all citizens of Botswana, refers to the country's major ethnic group (the "Tswana" in South Africa), which came into the area from South Africa during the Zulu wars of the early 1800s. Prior to European contact, the Batswana lived as herders and farmers under tribal rule.

In the 19th century, hostilities broke out between the Batswana and Boer settlers from the Transvaal. After appeals by the Batswana for assistance, the British Government in 1885 put "Bechuanaland" under its protection. The northern territory remained under direct administration and is today's Botswana, while the southern territory became part of the Cape Colony and is now part of the northwest province of South Africa; the majority of Setswana-speaking people today live in South Africa.

Despite South African pressure, inhabitants of the Bechuanaland Protectorate, Basuotoland (now Lesotho), and Swaziland in 1909 asked for and received British assurances that they would not be included in the proposed Union of South Africa. An expansion of British central authority and the evolution of tribal government resulted in the 1920 establishment of two advisory councils representing Africans and Europeans. Proclamations in 1934 regularized tribal rule and powers. A European-African advisory council was formed in 1951, and the 1961 constitution established a consultative legislative council.

In June 1964, Britain accepted proposals for democratic self-government in Botswana. The seat of government was moved from Mafikeng, in South Africa, to newly established Gaborone in 1965. The 1965 constitution led to the first general elections and to independence in September 1966. Seretse Khama, a leader in the independence movement and the legitimate claimant to traditional rule of the Bamangwato, was elected as the first president, re-elected twice, and died in office in 1980. The presidency passed to the sitting vice president, Ketumile Masire, who was elected in his own right in 1984 and re-elected in 1989 and 1994. Masire retired from office in 1998. The presidency passed to the sitting vice president, Festus Mogae, who was elected in his own right in 1999. Mogae won a second term in elections held October 30, 2004.

GOVERNMENT AND POLITICAL CONDITIONSBotswana has a flourishing multiparty constitutional democracy. Each of the elections since independence has been freely and fairly contested and has been held on schedule. The country's minority groups participate freely in the political process. There are three main parties and a number of smaller parties. In national elections in 2004, the Botswana Democratic Party (BDP) won 44 of 57 contested National Assembly seats, the Botswana National Front (BNF) won 12, and the Botswana Congress Party (BCP) won 1 seat. Individuals elected by the National Assembly hold an additional 4 seats; the ruling BDP currently holds all 4. The opposition out-polled the ruling BDP in most urban areas. The openness of the country's political system has been a significant factor in Botswana's stability and economic growth. General elections are held every 5 years. The next general election will be held in October 2009.

The president has executive power and is chosen by the National Assembly following countrywide legislative elections. The cabinet is selected by the president from the National Assembly; it consists of a vice president and a flexible number of ministers and assistant ministers, currently 14 and 6, respectively. The National Assembly has 57 elected and 4 specially elected members; it is expanded following each census (every 10 years; the most recent was conducted in 2001).

The advisory House of Chiefs represents the eight principal subgroups of the Batswana tribe, and four other members are elected by the sub chiefs of four of the districts. A draft of any National Assembly bill of tribal concern must be referred to the House of Chiefs for advisory opinion. Chiefs and other leaders preside over customary traditional courts, though all persons have the right to request that their case be considered under the formal British-based legal system.

The roots of Botswana's democracy lie in Setswana traditions, exemplified by the Kgotla, or village council, in which the powers of traditional leaders are limited by custom and law. Botswana's High Court has general civil and criminal jurisdiction. Judges are appointed by the president and may be removed only for cause and after a hearing. The constitution has a code of fundamental human rights enforced by the courts, and Botswana has a good human rights record.

Local government is administered by nine district councils and five town councils. District commissioners have executive authority and are appointed by the central government and assisted by elected and nominated district councilors and district development committees. There has been ongoing debate about the political, social, and economic marginalization of the San (indigenous tribal population). The government's policies for the Basarwa (San) and other remote area dwellers continue to spark controversy.

ECONOMYSince independence, Botswana has had the fastest growth in per capita income in the world. Economic growth averaged over 9% per year from 1967-97. The government has maintained a sound fiscal policy, despite three consecutive budget deficits in 2002-2004, and a negligible level of foreign debt. It earned the highest sovereign credit rating in Africa and has stockpiled foreign exchange reserves (over $5.3 billion in 2003/4) amounting to almost two years of current imports. Botswana's impressive economic record has been built on the foundation of wisely using revenue generated from diamond mining to fuel economic development through prudent fiscal policies and a cautious foreign policy. However, economic development spending was cut by 10% in 2002/3 as a result of recurring budget deficits and rising expenditure on healthcare services. While development spending is budgeted to increase by 12.3% in the 2005/6 fiscal year, the bulk of the money will be spent on ongoing projects and maintenance rather than new infrastructure. Real GDP growth is expected to slow in 2005 to between 3% and 4% from its 5.7% growth rate in 2004. The government recognizes that HIV/AIDS will continue to affect the economy and is providing leadership and programs to combat the epidemic, including free anti-retroviral treatment and a nationwide Prevention of Mother-to-Child Transmission program.

MiningTwo large mining companies, Debswana (formed by the government and South Africa's DeBeers in equal partnership) and Bamangwato Concessions, Ltd. (BCL, also with substantial government equity participation) operate in the country.

Since the early 1980s, the country has been the world's largest producer of gem quality diamonds. Four large diamond mines have opened since independence. DeBeers prospectors discovered diamonds in northern Botswana in the late 1960s. The first mine began production at Orapa in 1972, followed by the smaller mines of Lethlakane and Damtshaa. What has become the single-richest diamond mine in the world opened in Jwaneng in 1982. The Orapa 2000 Expansion of the existing Orapa mine was opened in 2000. In December 2004, Debswana negotiated 25-year lease renewals for all four of its mines with the Government of Botswana. The Debswana carat output for 2004 was a record 31 million carats making Debswana the world's leading diamond producer by value and volume. Exploration for other kimberlite pipes continues. In addition, as part of its drive to diversify and increase local value added within the mining sector, Botswana has announced plans to establish a joint venture company with De Beers, which will be Debswana's sorting and marketing arm.

BCL, which operates a copper-nickel mine at Selebi-Phikwe, has had a troubled financial history but remains an important employer. The soda ash operation at Sua Pan, opened in 1991 and supported by substantial government investment, has begun making a profit following significant restructuring. It produced 283,000 tons of soda ash in 2002. BCL is expected to significantly reduce operations within the next ten years.

Coal bed methane gas has been discovered in the northeastern part of the country, estimated by the developers at a commercially viable quantity of 12 trillion cubic feet. Development of the gas field, financed by the U.S. Overseas Private Investment Corporation, began in mid-2004.

TourismTourism is an increasingly important industry in Botswana, accounting for almost 12% of GDP, despite only modest growth of 2.9% in 2003/4. One of the world's unique ecosystems, the Okavango Delta, is located in Botswana. The country offers excellent game viewing and birding both in the Delta and in the Chobe Game Reserve--home to one of the largest herds of free-ranging elephants in the world. Botswana's Central Kalahari Game Reserve also offers good game viewing and some of the most remote and unspoiled wilderness in southern Africa.

AgricultureMore than one-half of the population lives in rural areas and is largely dependent on subsistence crop and livestock farming. Agriculture meets only a small portion of food needs and contributes a very small amount to GDP--primarily through beef exports--but it remains a social and cultural touchstone. Cattle raising in particular dominated Botswana's social and economic life before independence. The national herd is estimated between 2 and 3 million head, but the cattle industry is experiencing a protracted decline.

Private Sector Development and Foreign InvestmentBotswana seeks to further diversify its economy away from minerals, which account for a third of GDP (down from nearly half of GDP in the early 1990s). Foreign investment and management are welcomed in Botswana. Botswana abolished foreign exchange controls in 1999, has a low corporate tax rate (15%), and no prohibitions on foreign ownership of companies. The country's inflation rate has remained stable and comparatively low over the course of the past 10 years. However, rising fuel and utility prices along with the government's 12.5% devaluation of the Pula in May of 2005 have resulted in a spike in inflation to an average annual rate of 11.4% as of December 2005, which falls well outside the Bank of Botswana's target rate of between 4-7%. The Government of Botswana is currently considering additional policies to enhance competitiveness, including a new Foreign Direct Investment Strategy and National Export Development Strategy. Botswana's parliament recently adopted both a Privatization Master Plan and a new Competition Policy that are aimed at fostering economic diversification.

With its proven record of good economic governance, Botswana was ranked as Africa's least corrupt country by Transparency International in 2005, ahead of many European and Asian countries. The World Economic Forum rates Botswana as one of the two most economically competitive nations in Africa. In November 2005, Standard & Poor's once again assigned Botswana an "A" grade credit rating. This ranks Botswana as by far the best credit risk in Africa and puts it on par or above many countries in central Europe, East Asia, and Latin America.

U.S. investment in Botswana remains at relatively low levels. Major U.S. corporations, such as H.J. Heinz and AON Corporation, are present through direct investments, while others, such as Kentucky Fried Chicken and Remax, are present via franchise. The sovereign credit ratings by Moody's and Standard & Poor's clearly indicate that, despite continued challenges such as small market size, landlocked location, and cumbersome bureaucratic processes, Botswana remains one of the best investment opportunities in the developing world. Botswana has a 90-member American Business Council that accepts membership from American-affiliated companies.

Because of history and geography, Botswana has long had deep ties to the economy of South Africa. The Southern Africa Customs Union (SACU), comprised of Botswana, Namibia, Lesotho, Swaziland, and South Africa, dates from 1910, and is the world's oldest customs union. Under this arrangement, South Africa has collected levies from customs, sales, and excise duties for all five members, sharing out proceeds based on each country's portion of imports. The exact formula for sharing revenues and the decision-making authority over duties--held exclusively by the Government of South Africa--became increasingly controversial, and the members renegotiated the arrangement in 2001. A new structure has now been formally ratified and a SACU Secretariat has been established in Windhoek, Namibia. Following South Africa's accession to the World Trade Organization (WTO, of which Botswana also is a member), many of the SACU duties are declining, making American products more competitive in Botswana. Currently the SACU countries and the U.S. are negotiating a free trade agreement. Botswana is currently also negotiating a free trade agreement with Mercosur and an Economic Partnership Agreement with the European Union as part of SADC, and opened negotiations with China and India in 2005.

Botswana's currency--the Pula--is fully convertible and is valued against a basket of currencies heavily weighted toward the South African Rand. Profits and direct investment can be repatriated without restriction from Botswana. The Botswana Government eliminated all exchange controls in 1999. The Central Bank devalued the Pula by 12.5% in May 2005 in a bid to maintain export competitiveness against the real appreciation of the Pula and restructured the exchange rate mechanism to a crawling peg system to ensure against future large-scale devaluations.

Botswana currently chairs the 14-nation Southern African Development Community (SADC) and Gaborone hosts the SADC Secretariat's headquarters. SADC replaced the Southern Africa Development Coordination Conference (SADCC--launched in 1980, which focused its efforts on freeing regional economic development from dependence on apartheid South Africa. SADC embraced the newly democratic South Africa as a member in 1994. It has a broad mandate to encourage growth, development, and economic integration in Southern Africa. SADC's Trade Protocol, which was launched on September 1, 2000, calls for the elimination of all tariff and non-tariff barriers to trade by 2008 among the 11 signatory countries. If successful, it will give Botswana companies free access to the far larger regional market. SADC's failure to distance itself from the Mugabe government in Zimbabwe has diminished the number of opportunities for cooperation between the U.S. and SADC.

Transportation and CommunicationsA sparsely populated, semi-arid country about the size of Texas, Botswana has nonetheless managed to incorporate much of its interior into the national economy. An "inner circle" highway connecting all major towns and district capitals is completely paved, and the all-weather Trans-Kalahari Highway connects the country (and, through it, South Africa's commercially dominant Gauteng Province) to Walvis Bay in Namibia. A fiber-optic telecommunications network has been completed in Botswana connecting all major population centers. In November 2003, representatives of Botswana, Namibia and South Africa signed an MOU to simplify documentation to move cargoes to and from the Port of Walvis Bay in Namibia.

In addition to the government-owned newspaper and national radio network, there is an active, independent press (one daily and seven weekly newspapers). Two privately owned radio stations began operations in 1999. In 2000, the government-owned Botswana Television (BTV) was launched, which is Botswana's first national television station. GBC is a commercially owned television station that broadcast programs to the Gaborone area only. Foreign publications are sold without restriction in Botswana, and there are 22 commercial Internet service providers. Two cellular phone providers cover most of the country.

DEFENSEThe president is commander in chief of the Botswana Defense Force (BDF). A defense council is appointed by the president. The BDF was formed in 1977 and has approximately 13,000 members.

The BDF is a capable and well-disciplined military force. Following positive political changes in South Africa and the region, the BDF's missions have increasingly focused on border control and anti-poaching activities. The United States has been the largest single contributor to the development of the BDF, and a large segment of its officer corps has received U.S. training. It is considered an apolitical and professional institution.

FOREIGN RELATIONSBotswana puts a premium on economic and political integration in Southern Africa. It seeks to make SADC a working vehicle for economic development, and promotes efforts to make the region self-policing in terms of preventative diplomacy, conflict resolution, and good governance. Botswana joins the African consensus on most major international matters and is a member of international organizations such as the United Nations and the African Union (AU).

U.S.-BOTSWANA RELATIONSThe United States considers Botswana an advocate of and a model for stability in Africa and has been a major partner in Botswana's development since its independence. The U.S. Peace Corps returned to Botswana in August 2002 with a focus on HIV/AIDS-related programs after concluding 30 years of more broadly targeted assistance in 1997. Similarly, the USAID phased out a longstanding partnership with Botswana in 1996, after successful programs emphasizing education, training, entrepreneurship, environmental management, and reproductive health. Botswana, however, continues to benefit along with its neighbors in the region from USAID's Initiative for Southern Africa. The Regional Center for Southern Africa (RCSA), which implements the U.S. Agency for International Development's (USAID) Initiative for Southern Africa (ISA), is headquartered in Gaborone as well. The United States International Board of Broadcasters (IBB) operates a major Voice of America (VOA) relay station in Botswana serving most of the African Continent.

In 1995, the Centers for Disease Control (CDC) started the BOTUSA Project in collaboration with the Botswana Ministry of Health in order to generate information to improve TB control efforts in Botswana and elsewhere in the face of the TB and HIV/AIDS co-epidemics. Under the 1999 U.S. Government's Leadership and Investment in Fighting an Epidemic (LIFE) Initiative, CDC through the BOTUSA Project has undertaken many projects and has assisted many organizations in the fight against the HIV/AIDS epidemic in Botswana. Botswana is one of the 15 focus countries for PEPFAR, the President's Emergency Plan for Aids Relief and began receiving funding and assistance under this program in January 2004. PEPFAR assistance to Botswana, which totaled $20 million in FY 2004 and doubled to $40 million in FY 2005, is contributing to HIV/AIDS prevention, treatment, and care interventions.

The Governments of Botswana and the United States entered into an agreement in July 2000 to establish an International Law Enforcement Academy (ILEA) in Gaborone. The academy, jointly financed, managed and staffed by the two nations, provides training to police and government officials from Southern Africa and eventually from across the continent. The academy's permanent campus, in Otse outside of Gaborone, opened March 2003. Over 1,500 law enforcement professionals from Sub-Saharan Africa have received training from ILEA since it began offering classes in 2001.

The U.S. Embassy is on Embassy Drive off Khama Crescent--P.O. Box 90, Gaborone (tel. 267-353-982; fax 267-356-947). USAID is located on Lebatlane Road. DAO and ODC are located at the embassy. CDC is located on Ditlhakore Way in Gaborone. ILEA is located in Otse, about 30 minutes outside of Gaborone. The IBB station is located in Selebi-Phikwe, about 400 kilometers northeast of Gaborone.

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